It’s the end of August – the end of the always-too-short summer season in New England – and there has been a lot of negative news this week about U.S. home sales. Fun times. So what does it all mean? If U.S. home sales are down does that mean that home sales in Cambridge and Somerville are down? Are prices (values) down as well? Not necessarily… But before I come across as the ever-optimistic (unrealistic?) real estate agent, let’s look at some real data.
The following stats are from MLS and I broke the data down by housing type and zip code.
Let’s start with condominiums in all price ranges in Somerville, in zip codes 02143, 02144, 02145 and the city as a whole. Keep in mind 2010 is not over yet, but here are the numbers as of August 2010:
And here are the numbers for Cambridge condominiums 2005-2010:
So what does this data tell us?
First off, let’s look at the condo numbers in Somerville. If we look at just the 02143 data (Somerville – Porter Square and Spring Hill) for the past 5 years, we see that values in 02143 have held strong and the median sale price has even gone up – from $347,900 in 2005 to $368,500 in 2010. In 02144 (Davis Square/West Somerville) and 02145 (Winter Hill, East Somerville) the values have not held quite as strong. The median sale price in 2005 for a condo in 02144 was $419,500. That number is $384,500 today. Will this number rise by the end of the year? Possibly, but how far we won’t know until the end of the year. 02145 tells a similar and slightly more dramatic story. In 2005, the median sale price for condos in 02145 was $360,000. Today it is $245,000. This data begs the question, “Is there even an upside to declining values?” Yes – if you’re buying a home you can get a property for less money than you would have had to spend several years ago.
In Cambridge, properties in 02138 (Harvard Square, Porter Square) have held their value since 2005, while properties in 02140 (North Cambridge), 02139 (Mid-Cambridge, Cambridgeport) and 02141 (East Cambridge, Kendall Square) have seen some declines.
Now let’s compare apples to apples. The charts above looked at median sale price. The national news this week has been about number of home sales, not median prices. The chart below looks at number properties sold in Somerville and Cambridge between 2005 – 2010:
Yes, our local market sales numbers are also down. This makes total sense. Since the peak of 2005, and the economic crisis of 2008, we have seen a lot of overall economic volatility. But do people still buy and sell homes in Cambridge and Somerville? Yes. In 2009 you’ll see that in Somerville the sales numbers were better than 2008.
My point with all of this data is to put things in perspective. Real estate really is local. It’s important to keep in touch with national trends, but it’s imperative to also know the local data, city by city, even zip code by zip code. Only then can you make informed, smart decisions about whether or not now is a good time for you to buy or sell a home.
What will the rest of 2010 bring? I’ll continue to watch the numbers to see where our home sales numbers end up at the end of the calendar year. In the meantime, here’s a current article on the benefits of home ownership.
I hear that it’s supposed to be in the 90s this week. It seems that summer is sticking around a bit longer. Hope you get to enjoy it and I’ll keep an eye on our local home sales data. As always, please feel free to contact me for a more thorough market analysis of your area or comparative market analysis of your home.